Harare City Council is owed over $405 million by business, residents and government, as more people and organisations continue to default on rates and other services due to the worsening economic crisis.
BY MOSES MATENGA
The cash-strapped local authority has instituted tough measures, including auctioning defaulters’ properties to recover the debts.
Harare, as a result, is also battling to meet its monthly salary and statutory obligations including to the Zimbabwe Revenue Authority (Zimra) due to cashflow challenges.
“Debtors were reported at $405,3 million, creditors stood at $175,2 million,” a report by finance committee read.
The city reportedly owes $24,8 million to Cabs and BancABC for the purchase of refuse compactors.
“During the discussion, the committee noted with concern that level of debtors was ballooning. The committee was of the view that urgent corrective measures be taken to mitigate the situation,” the finance committee heard.
“It was also the committee’s view that efforts be made to engage all public institutions with the view to find ways of servicing debts.”
The committee was also told of the $50,8 million surplus on the aggregated income and expenditure summary from January to October 2015.
The city only collected $154 million from January to October this year.
Harare, according to the finance and development committee, was supposed to be paying $1 million as per the existing payment plan to Zimra to settle the $136,2 million arrears.
“Zimra is demanding an upward review so as to address the ballooning debt. The underpayment continued to attract interest and penalty charges at the prescribed rate and at 100% respectively,” the finance committee minutes further read.
“Council had made a waiver of the 100% penalty charge and this was not granted. Zimra was yet to renew the city’s tax certificate. In view of the above challenges, council had sought for the intervention of the Local Government, Public Works and National Housing ministry to find common ground between two parties in this regard.”
Regular consultations between the two parties were underway.